UPDATED: Low Fee Super Funds On Canstar

With Australians paying billions in superannuation fees every year, it may be worth checking the fees that apply when considering the right super fund for you.

Generally, your employer must pay at least 9.5% of your annual salary into your super account in addition to paying your salary. These contributions accumulate over time and are invested by your super fund with the purpose of helping provide a comfortable retirement. According to the Association of Superannuation Funds Australia (ASFA), a couple aged around 65 – who own their own home and are relatively healthy – would need to budget to have $60,604 per year in retirement to live comfortably.

And when it comes to the difference lower fees could make to your super balance when you retire, a MoneySmart case study suggests that a 30 year-old earning $50,000 per year (with an existing balance of $20,000) could have $81,000 more in super at age 65 by switching to a fund with total fees of 1% instead of 2.5%.

So, when considering super funds, you may want to take into account the fees that are charged, along with other factors like the fund’s long-term performance, plus other features such as the insurance that’s available within the fund and the quality of advice on offer from the provider.

To help give you an idea of the fees that may be charged by various funds, the tables below display a snapshot of low-fee super funds on Canstar’s database for a range of different account balances:

For each account balance, the annual cost takes into account administration fees, investment fees and performance fees where applicable, and any other indirect costs, while the cost of insurance is not considered.

Please note that to ensure like-for-like comparison, only the default investment option from each super fund has been captured within Canstar’s database (where there is no default, the option with the highest ‘funds under management’ and a 60-80% growth asset allocation is used), so the fees of the funds listed in the tables below are not necessarily the cheapest on the market.

Investment options that have larger holdings of defensive assets (e.g. term deposits and bonds) typically have lower fees, although the long-term returns may be less than that of a fund with 60-80% in growth assets.

Low-fee super funds for $30k super balance

The results below are based on a super balance of $30,000 for someone aged 18-29 and are sorted by annual cost (lowest to highest).

To view the annual cost in fees of all super funds rated by Canstar, use our comparison tool:

Low-fee super funds for $1.5m super balance

What fees are usually charged by a super fund?

There are a range of fees typically charged by superannuation funds:

Administration fees

Investment fees

Performance fees

Other indirect costs

Insurance fees

Administration fees

Administration fees cover general fund operation and administration costs, typically covering the provider for administrative tasks like sending annual statements to the fund’s members. Administration fees can be charged as a percentage of your overall balance, as a specified amount (which could vary depending on your balance), or will often be a combination of the two.

Investment fees

The investment fee covers the management of the investment option where your super is invested. This fee can vary based on your choice of investment and is usually charged as a percentage of your overall balance.

The investment fee is typically subtracted from the investment returns before the returns are added to your account, so it’s likely you wouldn’t notice it as missing if the fund didn’t point out how much performance was reduced due to this fee.

Performance fees

The performance fee is the fee charged in addition to the investment fee when the fund manager exceeds the target performance for the year. As with the investment fee, the performance fee is subtracted from the investment returns before the returns are added to your account.

Other indirect costs

As well as the fees outlined above, there are additional fees that may be charged to be aware of, including:

Switching fees, if moving from one investment option to another;

Exit fees, which may be charged if withdrawing all or part of your super, or if transferring your super to another super fund;

Advice fees, which may be charged when you obtain advice from your superannuation provider. This could be for a range of needs, such as choosing an appropriate investment option, deciding on a suitable level of insurance cover, or looking at what type of retirement lifestyle you can afford.

Insurance through super

The most common additional fee relates to when you have insurance included within your super account. Within your superannuation, it is possible to hold a combination of life insurance, total and permanent disablement cover and income protection. Your super fund may have automatically provided you with “default” cover, or you may have applied for “tailored” cover. In either case, there are additional charges for this cover.

Be aware of more than just fees

Low fees are an important consideration, but they aren’t the only factor to think about. For example, you may want to consider fees in conjunction with a fund’s long-term performance, as the savings gained from low fees can be reduced or even outweighed by poor performance. Although it’s worth remembering that a fund’s past performance is not necessarily an indication of future performance. Other factors to think about include the advice and insurance offerings of the fund you are considering.

Our list of top performing super funds may help you get an idea of which funds on Canstar’s database have historically performed well. Or, you can compare the fees and features of all the various super funds on Canstar’s database.

Compare Super Funds

Related

This advice is general and has not taken into account your objectives, financial situation, or needs. Consider whether this advice is right for you. Consider the product disclosure statement (PDS) before making any financial decision. For more information, read Canstar’s Financial Services and Credit Guide (FSCG).

Canstar is an information provider and in giving you product information Canstar is not making any suggestion or recommendation about a particular insurance product. If you decide to apply for an insurance product, you will deal directly with an insurance provider, and not with Canstar. Premiums and product information should be confirmed with the relevant insurance provider. For more information, read the product disclosure statement (PDS), Canstar’s Financial Services and Credit Guide (FSCG), detailed disclosure, important notes and liability disclaimer.

The inclusions mentioned represent a selection of what is covered at the time of writing. Additional terms and conditions may apply to different features. Additional fees may apply to the product. Please ensure that you read the product disclosure statement to determine all the current options and inclusions for the product you are considering.

Superannuation products displayed above that are not 'Sponsored' are sorted as referenced in the introductory text to the table. Canstar may receive a fee for referral of leads from these products. See How We Get Paid for further information. Products displayed above do not include all products/providers and may not include all features relevant to you. Please note that all information about performance returns is historical. Past performance should not be relied upon as an indicator of future performance; unit prices and the value of your investment may fall as well as rise.

Performance information shown is for historical periods up to 31/12/2018 and investment options noted in the product information. Performance figures shown reflect net investment performance, i.e. net of investment tax, investment management fees and the applicable administration fees based on an account balance of $50,000. Performance information is provided by Rainmaker Information Pty Ltd ABN 86 095 610 996 AFSL 461816 (www.rainmaker.com.au) which provides general information on superannuation. Performance data may not be available for some products. This is indicated in the tables by a note referring the user to the product provider, or by no performance information being shown.

Any advice on this page is general and has not taken into account your objectives, financial situation or needs and is not a recommendation for your particular circumstances. Consider whether this advice is right for you. Consider the product disclosure statement before making a purchase decision. You may need financial advice from a qualified adviser.

Performance, fee and other information displayed in the table has been updated from time to time since the rating date and may not reflect the products as rated. The performance and fee information shown in the table is for the investment option used by Canstar in rating of the superannuation product.

Investment returns of superannuation products: Canstar considers the annual investment returns of a product’s default investment option, including the default life-stage option where applicable. Where a product does not have a default investment option, annual returns for the investment option with the highest funds under management (FUM) and a 60-80% growth asset allocation are used.

Annual cost includes administration fees and indirect costs (including the investment fee, performance fee where applicable, and any other indirect management costs). This cost is calculated based on the super balance specified and the investment option considered in the 2018 Superannuation Star Ratings, which is the default investment option (including default life-stage options). Where a product does not have a default investment option, annual fees for the investment option with the highest FUM and a 60-80% growth asset allocation are used.

Performance and Investment Allocation Differences
• Fee, performance and asset allocation information shown in the table above have been determined according to the investment profile in the Canstar Superannuation Star Ratings methodology that matches the age group you selected.
• Some providers use different age groups for their investment profiles which may result in you being offered or being eligible for a different product to what is displayed in the table. See here for more details.
• SunSuper’s allocation of funds for investors aged 55-99 differ from Canstar’s methodology – see details here.
• The Sunsuper for Life product may appear in the table multiple times. While you will not be offered any single investment option, this is to take into account the different combinations of investment options SunSuper may apply to your account based on your age. For more detail in relation to the SunSuper for Life product please refer to the PDS issued by SunSuper for this product.
• QSuper sets different balance ranges, resulting in a different investment mix in some cases to that resulting from Canstar’s methodology – see details here.
• Investment profiles applied initially may change over time in line with an investor’s age. See the provider’s Product Disclosure Statement and in particular applicable age groups for more information about how providers determine their investment profiles.

Products marked as 'Sponsored' are paid advertisements and Canstar receives a fee for referring you to the advertiser. Canstar is not giving you financial advice in relation to Sponsored products.

Please note that all information about performance returns is historical. Past performance should not be relied upon as an indicator of future performance; unit prices and the value of your investment may fall as well as rise.

Please note that all information about performance returns is historical. Past performance should not be relied upon as an indicator of future performance; unit prices and the value of your investment may fall as well as rise.

This advice is general and has not taken into account your objectives, financial situation or needs. Consider whether this advice is right for you. Consider the product disclosure statement before making a purchase decision. Canstar provides an information service. It is not a credit provider, and in giving you information about credit products Canstar is not making any suggestion or recommendation to you about a particular credit product. Statistics referenced on this page have been verified by Canstar Research. Research provided by Canstar Research AFSL and Australian Credit Licence No. 437917.